If we find a company we like, the level of the market will not really impact our decisions. We will decide company by company. We spend essentially no time thinking about macroeconomic factors. In other words, if somebody handed us a prediction by the most revered intellectual on the subject, with figures for unemployment or interest rates or whatever it might be for the next 2 years, we would not pay any attention to it.
We simply try to focus on the businesses that we understand and where we like the price and management. If we see anything that relates to what’s going to happen in Congress, we don’t even read it. We just don’t think it’s helpful to have a view on these matters.
It doesn’t have to be rock bottom to buy it. It has to be selling for less than you think the value of the business is, and it has to be run by honest and able people. But if you can buy into a business for less than it’s worth today and you’re confident of the management, and you buy into a group of businesses like that, you’re going to make money.
When Warren Buffet was asked how he and Munger perform “due diligence” on companies they buy, Buffet said:
“If you have to go through too much investigation, something is wrong.”
According to Buffet, gold is nonproductive.
You should invest in a business that even a fool can run, because someday a fool will.Warren Buffet never starts new companies, he either invests in stock of existing ventures or buys successful companies outright.